Introduction

Filecoin, as a decentralized storage network, achieves global data storage and retrieval by linking storage clients with providers. On March 14, 2023, the Filecoin Virtual Machine (FVM) was launched on the main network, introducing smart contract functionality to Filecoin, which sparked renewed interest in the market and project development.

Filecoin Ecosystem and FVM: An Overview

Understanding Filecoin

Filecoin is a decentralized storage network based on IPFS, primarily acting as an open-service storage, serving as the incentivization layer on IPFS. IPFS forms the distributed storage and sharing layer of the Filecoin network. Filecoin, through economic incentives, has spurred the development of IPFS, fostering an open and reliable data storage market. At the same time, IPFS provides ecological support for developing the Filecoin market.

The vision of Filecoin is to replace traditional cloud storage through the aggregation of massive storage capacity and computational power of Filecoin miner nodes. The primary demand for Filecoin originates from Web3 storage scenarios: ranging from Non-Fungible Tokens (NFTs) to metaverses and games, and further to Web3 storage and sustainable storage. Currently, the Filecoin ecosystem is witnessing significant growth. In the future ecosystem, users will progressively achieve programmability, retrievability, and scalability, which are facilitated by the launch of the Filecoin Virtual Machine.

What is the Filecoin Virtual Machine (FVM)

The Filecoin Virtual Machine (FVM) is a virtual machine architecture based on the Filecoin network. It permits developers to write and execute smart contracts directly on the Filecoin network, imbuing Filecoin with programmability. This allows for functions such as data processing, conversion, and encryption.

FVM is fully compatible with Ethereum’s EVM. Developers can utilize Solidity and other Ethereum-compatible languages to write smart contracts. However, compared to EVM, the FVM’s instruction set is more streamlined, and it supports unique Filecoin storage and retrieval features.

Upon the launch of the FVM, smart contracts on Filecoin will interact with its storage data, paving the way for the development of innovative applications.

The Functioning of FVM

FVM, constructed atop WebAssembly (WASM), enables the crafting of native Filecoin actors in languages compiled to WASM, as well as smart contracts authored for external runtimes. WASM, or WebAssembly, is an assembly language custom-designed for web browsers.

Integrated within FVM is an Ethereum Virtual Machine (EVM). When in operation, it permits Ethereum and Solidity developers to execute their contracts on the FVM with minimal alterations. The FEVM (Filecoin EVM) is an Ethereum Virtual Machine built on the Filecoin Virtual Machine, virtualized at runtime.

This setup facilitates developers in porting any existing EVM-based smart contracts directly onto the FVM. The Filecoin EVM runtime is fully compatible with any EVM development tools, such as Hardhat, Brownie, and Metamask. This is possible because Filecoin nodes provide the Ethereum JSON-RPC API, simplifying deployment and interactions with EVM-based participants.

Upon completion of milestone 2.2 in the FVM roadmap, developers will have the option to deploy actors on either the FEVM or the native FVM. In other words, if performance is not a priority, one could deploy to the FEVM; for superior performance, crafting actors compiled to WASM for deployment on the native FVM would be the choice.

New Applications of FVM

With the launch of FVM and the introduction of smart contracts, developers can create universal DeFi, GameFi, and NFT applications on its public chain, anticipating explosive growth in its ecosystem. The future products built within the FVM ecosystem will not be limited to DataDAO, permanent storage, and collateral leasing.

The DataDAO Solution

Data DAO can create a data economy, where users can capture and represent the societal value of these datasets. They can even exchange these data tokens and request computation services for the data among peer points, such as validation, connection, analysis, feature detection, and extraction.

Permanent Storage

Before the launch of FVM, storage transactions were not permanent. Storage transactions on Filecoin had an expiry date and were updated every 1.5 years. After the expiration date, the data would be deleted and irretrievable. With FVM, uploaders can specify their desired number of replications and the required expiration date.

The expiration date can be set for a significant period in the future, such as 5 years, 10 years, or even indefinitely. As long as there are funds (FIL) in the contract account, the contract will continually incentivize storage providers, creating transactions to replicate the file for storage.

Collateral Leasing

Storage Providers (SPs) are required to post collateral (in the form of FIL) to load storage capacity onto the network and accept storage transactions. This collateral incentivizes the storage providers to act correctly by timely providing data proof (PoRep, PoSt), otherwise, they risk being penalized. However, the need for collateral creates friction and becomes a direct obstacle to SP participation and growth.

On the other hand, the Filecoin network possesses many long-term token holders who wish to see the network grow and are willing to lend their FIL to credible and growth-oriented SPs. Collateral leasing can solve this issue. Storage providers can lease FIL collateral from token holders, and smart contracts will lock future income (block rewards) until the storage providers have repaid their leased FIL, thus connecting Fil token holders and storage providers more efficiently.

FVM Development Roadmap

The goal of the FVM project is to endow the Filecoin blockchain with universal programmability. Its roadmap is divided into three steps:

• Milestone 1: Initiate the project and permit built-in actors to run on FVM.
• Milestone 2: Support the deployment of Ethereum Virtual Machine (EVM) compatible smart contracts to FVM. Furthermore, allow developers to create their own native actors and deploy them to FVM.
• Milestone 3: Continue enhancing the programmability of FVM.

Currently, the development of FVM has reached stage 2.1, in which developers can deploy smart contracts written and compiled in Solidity for EVM. These smart contracts will be able to access Filecoin functions by invoking built-in participants, and existing Ethereum tools will be compatible with Filecoin. The network will continue to evolve in the future.

Source: FVM Official Website https://fvm.filecoin.io/

The Significance of FVM for the Filecoin Ecosystem

The functionality of the Filecoin ecosystem is currently somewhat limited, predominantly confined to data storage. Moreover, much of the data stored is computationally generated and of little utility, thereby restricting expansion into broader application contexts. However, the initiation of the Filecoin Virtual Machine (FVM) promises to usher in a new era of possibilities and scenarios for the Filecoin network.

First and foremost, FVM offers substantial programmability for users. It allows the creation of various types of smart contracts for data storage verification and application deployment. This additional capability brings heightened assurance and benefits to storage providers and clients alike.

Moreover, FVM allows developers to construct diverse types of Decentralized Applications (DApps) on the Filecoin network. These include decentralized data storage applications, data storage marketplaces, and more. Developers using FVM to create DApps and utilize the Filecoin network to meet storage and computational requirements will result in a more robust and secure Filecoin ecosystem.

Lastly, FVM can also be used to implement governance and voting functions within the Filecoin network, unlocking the potential for expanding applications, markets, and organizations. This cultivates a more integrative and improved ecosystem, thus fostering community development and growth.

Conclusion

FVM brings programmability to the Filecoin network, allowing developers to construct smart contracts on-chain, thereby unleashing the vast potential of the Filecoin ecosystem in terms of functionality and suitability. Going forward, FVM, with its enhanced development architecture, will broaden the scope of possible ecosystem development, drawing more developers into the Filecoin network to create new DApps. Anticipated advancements within the Filecoin ecosystem include Defi, NFT, and other Web 3.0 application scenarios. The growth of the entire ecosystem will undoubtedly lead to more innovative usage scenarios for decentralized storage.